Hi Corzair - the problem is some of the points of your watch body surface are collapsed together at this spot:
Pinched-together points like that tend to create problems for intersection calculations which are used for trimming and boolean operations. There is special stuff in place to handle the case where all the points for an entire surface edge are pinched together, like at the pole of a sphere, but here you only have some of the points of an edge pinched together, not all of the points for the whole edge.
I think you'd be better off with a sort of different approach - instead of trying to build the whole watch body all in one loft, you'll need to build it more in pieces and use filleting to make rounded off corners. I'll see if I can make you an example later on today, probably a quick way to do it would be to do an extrusion from the top view and then an extrusion from the side view and intersect them to get your base shape.
- Michael
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